Post by account_disabled on Feb 22, 2024 3:13:31 GMT -5
Than doubled in and stocks preserved real wealth through persistent inflation later in the decade. Overall, the UK stock market roughly doubled in the five years after Margaret Thatcher was elected in 1979, while the cost of living rose about 70 percent. Of course, some companies cope with inflation better than others, and some fundamental characteristics become important when it comes to selecting stocks for an inflation-resistant portfolio. The companies that do best usually make products or offer services that people will have a hard time doing without. They have few competitors and carry little debt (avoiding higher interest payments). Resilience When we talk about inflation with company managers, they point to their years of experience in managing it.
Unilever, which I own, has only performed in line with market expectations in recent years and arguably needs a shake-up of its product line, but its bosses have a pretty good Pakistan Phone Number idea of which brands are coping. better. The price goes up. Marmite consumers won't switch to Vegemite (or vice versa), which is why Unilever managed to drive a 23 per cent price rise over the past year. On the other hand, Dove soap users not only have sensitive skin: they are also price-sensitive and are happy to switch brands. Unilever's response here has been more subtle: “counterinflation.” Dove soap bars were made 10 percent smaller last year, according to The Grocer magazine. Emerging markets Unilever is one of those companies that operates in emerging markets, where it has had to learn these important nuances.
Many companies operating under conditions of persistently high inflation have demonstrated that they can increase shareholder value despite the pressures. Argentine conglomerate Sociedad Comercial del Plata, which has interests in energy, rail transportation and real estate, has seen its shares rise 1,500 percent in the last three years, according to Bloomberg. In pesos, its price has risen from 3 to around 50. Therefore, it has easily outperformed global stocks, despite the conversion loss from the fall of the Argentine peso. It trades at just five times earnings. Argentines tend to save in US dollars if they can, to avoid having pesos (a dollar cost 4 pesos in 2010; it now costs 350 pesos), but it is notable that many local stocks traded in pesos have also protected local savings from inflation in the last years.
Unilever, which I own, has only performed in line with market expectations in recent years and arguably needs a shake-up of its product line, but its bosses have a pretty good Pakistan Phone Number idea of which brands are coping. better. The price goes up. Marmite consumers won't switch to Vegemite (or vice versa), which is why Unilever managed to drive a 23 per cent price rise over the past year. On the other hand, Dove soap users not only have sensitive skin: they are also price-sensitive and are happy to switch brands. Unilever's response here has been more subtle: “counterinflation.” Dove soap bars were made 10 percent smaller last year, according to The Grocer magazine. Emerging markets Unilever is one of those companies that operates in emerging markets, where it has had to learn these important nuances.
Many companies operating under conditions of persistently high inflation have demonstrated that they can increase shareholder value despite the pressures. Argentine conglomerate Sociedad Comercial del Plata, which has interests in energy, rail transportation and real estate, has seen its shares rise 1,500 percent in the last three years, according to Bloomberg. In pesos, its price has risen from 3 to around 50. Therefore, it has easily outperformed global stocks, despite the conversion loss from the fall of the Argentine peso. It trades at just five times earnings. Argentines tend to save in US dollars if they can, to avoid having pesos (a dollar cost 4 pesos in 2010; it now costs 350 pesos), but it is notable that many local stocks traded in pesos have also protected local savings from inflation in the last years.